This is going to be the year - the year we finally get on top of our personal finances. Yes, come January we'll all be making similar promises to ourselves but there is a way - and it's not even too painful. There will be no forced selling of unwanted Christmas pressies on eBay (though that's not a bad idea), there will be no flogging the second car or the apartment in Turkey.
(And that is the first and last time we will mention Turkey over the festive season) (And by the way, any chance we can go stay in your apartment?)
Make a budget
So it's time to sit down and make out a budget. Write down all your outgoings or keep a spending diary (it may help to keep all your receipts for a while - anywhere you like, in a notebook or plastic bag). Write down the basics and not so basics. Basics include rent/mortgage, utilities (gas, electricity, digital TV, broadband) food, car tax, car insurance, petrol, diesel (if you have a car obviously), other transport costs like bus, train and taxi. Include the cost of any personal loans, credit card and catalogue repayments. In the not so basics section include clothing, doctor's bills, your morning coffee, hairdressing, holidays and reading materials (your weekly magazine fix, daily and weekend newspapers). Now here's the painful part. Add it up. Get your last payslip and compare the two figures. If your outgoings are more than your income then you know what to do. If your income is more than your outgoings, then congratulations. Slap it in a savings account!
Clear your credit card
There are plenty of ways to do this. You could try cutting it up, you could try getting a personal loan to clear it off, you could take out your savings and pay it off because the interest you are getting on your savings is far less than the interest you are paying on your credit card. You could also try transferring the balance on your existing card onto another credit card with an interest free period. (See Five of the best credit cards to use this Christmas.) Make this the year you tackle your credit card debt. Even if you pay off more than the minimum every month this is better than sticking your head in the sand (see Five more great ways to make the most out of your money.) And you could try to discipline yourself and not use the card unless there is a real financial emergency.
Look around for the best possible deals
We're all shopping in Aldi and Lidl. It's an easy enough switch to make. But there are plenty of other easy switches and you're on the right site to make them. You can get cheaper digital TV, broadband, electricity, travel insurance, home insurance, car hire, hotels and flights. You can also let us help you take a look at switching your credit card, getting a better rate on a personal loan, car loans, savings and mortgages. Loans may not be easy to come by but it should be easy to switch your broadband, digital TV, electricity within a couple of minutes. With insurance costs on the rise after the floods last month, then check out our home insurance before you agree to renewing your policy.
Claim back anything owed
If you have health insurance then there's no doubt there is a little pile of doctor's receipts lurking in the back of the cupboard. There they are, just waiting to be looked at - well contact your health insurer and get yourself a claim back form. Sit down and fill it in. It'll only take a few minutes (VHI has recently simplified its form making it even quicker). Claim back any tax you might be owed, remember to include things like bin tags, PRSI on eye tests, dental treatments etc. Changes to PRSI at the beginning of January means PRSI now only covers one dental exam or one optical exam but you can get pre-approval for treatments at some dentists' clinic if you book with them now (but definitely before Wednesday). Fill out MED2 forms and get them in. Remember you are entitled to claim back these taxes - so go do it. Already 825,000 workers have clawed back a staggering €580m from the taxman in the first 10 months of 2009.
Clear the overdraft
Ok, most of us slip in and out of our overdraft from time to time but it's a bad way to manage money. There's nothing worse than seeing yourself €400 in credit on payday - the rest of it has been eaten up by your overdraft. Try to reduce your outgoings every month, see where you can make savings. Go in and talk to your account manager to see if they can help you make out a budget - if you can't do it yourself. Local credit unions are also great at helping you manage your money. It might be a bit painful for a few months but remember, you are paying your bank money every time you go into the red. You'd get help if you were trying to quit smoking, get fit or lose weight, right? So why not get help with your money. You are being charged interest or a quarterly banking fee every time you use your overdraft. One thing in our favour now is that interest rates are low, but banks are pushing up their charges in a bid to claw in some much needed cash. Don't pay to use your own money.
According to one of financial whizz David McWilliams' recent documentaries (Addicted to Money), the Chinese workers are keeping America going with their (US equivalent) $2 a week savings from their wages of $7 (or figures to that effect). Ok, that's probably oversimplifying it a tad but it sounds like a fair chunk of money to take out of your earnings every week to me. The workers are putting it by because they have to - there are no credit cards to get them through to the end of the month or easy credit options. The money is being put by for the future - times when they have no work or are simply unable to work due to illness or old age. It makes sense to save - even more sense in times like this. If we put a few quid by on a regular basis, it will soon mount up. It will at least be there to meet an unexpected bill or the few months wait between jobs. Losing your job suddenly is a real fear for a lot of people now so it makes sense to save for a rainy day. Aim to save the equivalent of three months wages.